Talk of Another School Merger
(August 22, 2014)–In Ta Policy Brief late last year (Volume 13,
Number 48) we reviewed the school district merger between Center Area
and Monaca in Beaver County. Those districts merged to become
Central Valley. We noted that combining the districts did in fact
result in some cost savings, albeit minor, in the three years
post-merger. We also noted that given the sluggishness of the
economy and the looming pension burden facing most districts, that
perhaps merging school districts is an idea worth revisiting.
Recently two neighboring Allegheny County school districts, Moon and
Cornell, have openly discussed the possibility of merging.
There are several factors that will pay important roles in a decision
to merge or not to merge. Obviously, one of the key reasons to merge
will be a potential, meaningful reduction in expenses of the combined
district. Potential cost savings can be realized in several areas
where duplication of functions can lead to cuts–such as
administrative expenses, athletics and related personnel expenses,
duplicative music and extracurricular program savings. Presumably,
only one superintendent, one football coaching staff, etc. would be
needed. Likewise, depending upon the size of the two merger
candidates and space utilization, closing school buildings and
reconfiguring school coverage areas could be a major source of
savings.
Furthermore, there are efficiencies to be gained from reorganizing
programs and teaching assignments. A larger district should be able
to offer more programs such as advanced math and science courses or
more offerings in foreign language–all of which have the potential
to enrich and boost the quality of the academic experience.
Other relevant factors can support the notion of a merger. For
instance, declining enrollments in both districts and forecasts of
continuing decline could be an incentive to better utilize facilities
and staff by combining. In such instances, the ability of the
separate districts to sustain the variety and quality of academic,
arts and extracurricular programs becomes increasingly difficult and
less economically viable. Another factor that makes a successful
merger more likely is whether or not the academic performance of the
students in the two districts are similar and therefore likely to be
compatible in a merged district.
Of course, merging two districts will present some serious challenges
that must be confronted. First and foremost will be political and
labor considerations. How will the two school boards approach the
prospect of merging? After a merger, how will the board be
comprised? That said, combining two boards may not be nearly as
complicated as merging labor contracts. Problems will arise when
there are differing pay scales for employees in the two districts, as
well as differences in work rules, grievance procedures and benefit
packages including healthcare. Then too, long-term liabilities such
as debt levels and pension issues plans must also be dealt with.
As we noted in last year’s Policy Brief, Center and Monaca districts
worked through these issues to merge successfully. Can the Moon and
Cornell school districts follow in their footsteps? The most
interesting thing about these two districts is that they are very
different in terms of enrollment and pattern of enrollment change.
Moon, whose board directed the superintendent to pursue a merger with
Cornell, has almost six times the enrollment of Cornell (3,700 vs.
650 as of the last school year, 2013-2014). In addition, Moon’s
enrollment, drawn from Moon and Crescent Townships, has remained
fairly steady over the last five years (up one percent) while
Cornell’s, coming from Coraopolis Borough and Neville Township, has
fallen about four percent during that time. Moon has many more
buildings–one high school, two middle schools, and five elementary
schools. Cornell has but one building that houses both elementary
grades (K-6) in one wing and the upper grades (7-12) in the other.
Based on this information would the Cornell building be closed and
its students folded into the Moon system? Local news reports
indicate that the Moon district is shuttering one of its elementary
schools for the upcoming school year. How would a merger affect this
decision?
News reports indicate Cornell is willing to listen to Moon regarding
a possible merger. It is noteworthy that comments from parents in the
Cornell district focused on the opportunity to improve academic and
athletic offerings from a merger with Moon as a result of
efficiencies from reorganizing programs. They also mentioned the
possibility of lower tax rates–which is naturally on property
owners’ minds these days because of the huge pension funding
requirements that are coming over the next several years.
According to school financial data from the State Department of
Education, the equalized millage rate for Cornell stood at 30.6 mills
for the 2012-2013 school year (latest available) while Moon’s
equalized millage came in at 24.5. Local real estate tax revenue was
$6.9 million in Cornell and $38.8 million in Moon. Of course, the
Moon District covers a much larger area and has a much larger
aggregate market value for taxable property ($1.84 billion vs. $273.8
million). However, on a per pupil basis they collect nearly the same
amount of local real estate revenues ($10,700 for Cornell and $10,400
for Moon) owing in part to the higher millage rate in Cornell.
Obviously, the ability to save money will depend on how finances,
especially expenditures, are handled in the merged district. For
virtually all school districts, personnel costs account for the
majority of expenditures. On a per pupil basis, Cornell tops Moon
with $18,500 in total outlays compared to Moon’s $16,500. They are
also higher per pupil in the broad categories of classroom
instruction, administration, operation and maintenance of plant
services, and student transportation services. Thus, it is apparent
that Cornell is receiving more dollars in state or other education
assistance per student than Moon–on a per pupil basis, Cornell
received roughly $5,200 from the state while Moon received $3,350.
A potential serious problem arises due to the differences in teacher
pay levels. Average salaries are significantly higher in the Moon
District than in Cornell. Note that for the most recent year with
available data (2012-2013) average teacher salaries in Moon ran
$10,000 higher than in Cornell ($61,000 vs. $51,000). The spread was
even larger for administrative personnel where the average salary in
Moon was more than $102,800 while in Cornell it came in just below
$82,000. As mentioned above, merging the two labor contracts will be
a major challenge.
Consider that prior to merging Center Area’s teachers had an average
salary of $57,150 while Monaca’s average was $52,350. In its first
year of the merged district the average salary for Central Valley
classroom teachers was $57,200. Of course the number of teachers had
fallen from a combined 207 to 139 in that first year while the most
recent data pegs it higher (157).
Another problem that is almost certain to arise is the gap in
academic performance as measured by the latest available PSSA scores
from the two districts. For all grades, twenty percent more Moon
students score at the advanced or proficient level than Cornell
students in both math (87 percent to 68 percent) and reading (84
percent to 64 percent). For 11th graders the scores are even further
apart for the two districts. In math, Moon had 76 percent advanced
or proficient, Cornell only 49. In reading, Moon had 80 percent
advanced or proficient while Cornell had only 44 percent. Even more
concerning, 39 percent of Cornell students scored below basic in math
compared to 13 percent in Moon. Thus, the merger of the two
districts is likely to encounter problems unless or until those gaps
can be reduced.
Nonetheless, despite the challenges faced in a possible merger
between the Moon School District and the Cornell District, both have
expressed a willingness to talk about merging their districts. The
Center/Monaca merger provides evidence that successful voluntary
mergers can be done and there are advantages such as cost savings,
economies of scale, and improved academic offerings. Whether or not
these two school districts proceed past talking about a merger
remains to be seen. The issues raised by this Policy Brief will
undoubtedly be discussed at length.
Jake Haulk, Ph.D., President
Frank Gamrat, Ph.D., Sr. Research Associate
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